Challenges ahead in 2016

Canadian employers are emerging from a turbulent year confident business will grow in 2016, yet many aren’t taking the steps necessary to deliver on that expectation.

Findings of the sixth annual Hays Salary Guide reveal that a general sense of buoyancy masks looming staff retention and recruitment problems, a lack of succession planning and reputational issues, which, combined, could ultimately spell big trouble for Canadian employers.

The Hays 2016 Salary Guide highlights employer confidence, a look at business expectations versus results and a snapshot of hiring trends and challenges. Going into 2015, Hays found nearly three-quarters of respondents anticipated business increases during the year, however only 46 per cent actually saw gains. In fact, employers across Canada said business activity was down more than 10 per cent versus 2014 levels, suggesting the unsteady economy caught many off guard.

Alberta experienced the greatest loss of business, which is to be expected with the oil price decline. Fifty-two per cent of Alberta respondents said their business dropped and as a result of the oil price collapse, many were forced to make unexpected cuts to staff.

Despite this reality, and the Bank of Canada and others predicting little growth in 2016, nearly 60 per cent of Canada's employers believe they are poised for success in 2016.

"It's encouraging that Canadian employers plot their own paths to success irrespective of what's happening with the country's economy," said Rowan O'Grady, president of Hays Canada. "This cautious optimism and self-assurance is further evidence of a tenacious business spirit. However, I am concerned that many have unresolved recruitment and retention problems that have been accumulating for some time and may have left them very vulnerable if they don't act now."

Kicking problems down the road?

While the nation's employers plan a positive surge into 2016, many report that staff are under considerable pressure and efforts to alleviate burnout and low morale over the past year have had no effect. To help lighten the workload, half said they plan to hire new staff in 2016 but they lack the resources to properly recruit the new hires. This is further complicated by the fact that nearly one-third of respondents admit they don't offer competitive salaries or are unaware of current market rates. Not surprisingly, one-quarter said finding candidates was more difficult in 2015 than previous years.

Respondents acknowledged that employee advancement and succession is a low priority for them, yet they believe Canada suffers from a skills shortage, which is often due to a lack of staff development. Given the competitiveness in Canada's labour market, Hays asked if recent graduates or more junior candidates were a hiring option and 65 per cent said they aren't actively recruiting them, citing issues such as a lack of industry knowledge and soft skills, as well as loyalty and training costs.

While perceived skills shortages keep many employers awake at night, for the first time in two years the survey revealed that company reputation and awareness now tops the list of recruitment burdens. Respondents said stereotypes and company reputation results in fewer people pursuing careers in their industry, but the only people who can change this are employers themselves.

What did employees say?

This year’s survey confirmed some employer concerns may be justified and a disconnect exists between what companies offer and what current staff and potential candidates consider important. Career progression is the number one employee expectation and nearly one-third (29 per cent) will leave a company that doesn't support their goals.

"Training staff and supporting career development is no longer a nice-to-have perk. It's a basic employee expectation and failing to live up to that can be a deal-breaker," O'Grady said. "The challenges highlighted in this report are well-known to employers but tackling them hasn't happened and they seem to be backing themselves into a hazardous corner."

Other key findings from this year’s survey include:

More than three-quarters of Canadian employers (77 per cent) have moderate to extreme difficulty recruiting talent.

Sixty-one per cent of Canadian employers have moderate to extreme difficulty holding onto staff.

Twenty-nine per cent of employees will leave an organization that doesn't support their career development goals. While half of employers recognize the importance of career development goals to their employees, they choose instead to focus on salary, company culture and benefit packages.

Two in five employers (42 per cent) feel that the skills shortage has resulted in productivity issues

Fewer than half of Canadian employers (49 per cent) find social media to be an effective tool for recruiting staff